"Chap" is an informal antiquated way for "fellow", "dude", "guy". It becomes "chappy" for making it rhymes with "happy".
If you're happy chappy, you're pleased, happy.
Often used in a sarcastic way and with a negative.

- "Omg, how do you even like this song, it really sucks!"
- "Sounds like you're not a happy chappy...go listening to your stuff then"

Used sarcasticly - One who when you try to crack a smile from let alone a conversation, it finds you more at odds than as a one legged man in an ass kicking competition. Very uncomfortable and most often resulting in random comments on the weather.

"sooo...its nice to finally meet you...what do you do for a crust"?
".....I work....."
"gee thats nice...in what field"?
".....Sales......"
"So hows about that sky...blue or what" (said with transparent enthusiasm)